July 13, 2022 Newsletter

Dear Friends,

Tangents:
On July 13, 1977, a 25-hour blackout hit the New York City area after lightning struck upstate power lines.  Go to article »
1930: First World Cup soccer championship.

Harrison Ford, actor, b. 1942.
Erno Rubik, inventor, b. 1944.

‘Pristine’ 200-year-old mine uncovered, plus items workers left behind.  Leather shoes. A clay bowl. A small button. Researchers are calling this incredible discovery a compelling window into the past. 

Netflix will work with Microsoft to offer a cheaper, ad-based service.

Ancient sanctuary used by Roman soldiers nearly 2,000 years ago found in the Netherlands: One of the most extensive ancient Roman temple complexes in northern Europe, which includes sacrificial altars used by soldiers on a far frontier of the Roman Empire, has been unearthed in the Netherlands.  The first century A.D. site — known as a temple sanctuary — was located near the fork of the Rhine and Waal rivers and a short walk from Roman forts along the Lower German Limes, which was then the northernmost border of the empire. It now lies near the Dutch city of Zevenaar in the eastern Gelderland region, near the border with Germany.
Full Story: Live Science (7/13) 

The James Webb Space Telescope’s first images are here, and they’re spectacular:  NASA has released the first suite of images from the newly operational James Webb Space Telescope, revealing the wonders of our universe in more detail than ever before.  Stars explode in spectacular orange and blue light. Galaxies writhe and dance around each other in a tangle of dust and baby stars. An alien planet pulses with haze. Some of the oldest light in the known universe — emitted more than 13 billion years ago — bends around massive potholes of gravity to shine before our eyes, clear as day.  Full Story: Live Science (7/12) 

PHOTOS OF THE DAY

Sebastian Prajsnar carries the Queen’s baton for the Birmingham 2022 Commonwealth Games in the aquarium at the Deep as the baton continues its 25-day tour in the countdown to the games
CREDIT: Danny Lawson/PA

A woman stands in a water fountain art installation, Changing Spaces by Jeppe Hein, at the Rockefeller Center
CREDIT: Edna Leshowitz/Zuma/Rex/Shutterstock

People climb Pico de las Nieves to observe the Teide volcano on the neighbouring island of Tenerife
CREDIT: Borja Suárez/Reuters

Market Closes for July 13^th, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1852, Wells, Fargo & Co. opened for business in San Francisco and Sacramento. It was founded by Henry Wells and William G. Fargo to convert gold dust into cash for miners, as well as to transport and safeguard letters, gold nuggets and other valuable by-products of the California Gold Rush.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the fourth day, dropping 0.3%, or 63.45 to 18,615.19 in Toronto.
The index dropped to the lowest closing level in at least a year.
Royal Bank of Canada contributed the most to the index decline, decreasing 1.0%.
Ritchie Bros Auctioneers Inc. had the largest drop, falling 9.3%.
Today, 125 of 238 shares fell, while 110 rose; 6 of 11 sectors were lower, led by financials stocks.
Insights
* The index declined 8.2% in the past 52 weeks. The MSCI AC Americas Index lost 15% in the same period
* The S&P/TSX Composite is at its 52-week low and 16.2% below its high on April 5, 2022
* The S&P/TSX Composite is down 0.6% in the past 5 days and fell 5.7% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 14.5 on a trailing basis and 11.2 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.2% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$2.99t
* 30-day price volatility little changed to 19.58% compared with 19.60% in the previous session and the average of 19.98% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Financials | -70.8559| -1.2| 3/25
* Industrials | -24.9165| -1.1| 7/22
* Energy | -5.6476| -0.2| 18/20
* Information Technology | -5.3020| -0.5| 5/8
* Real Estate | -2.3053| -0.4| 7/16
* Consumer Discretionary | -0.2235| 0.0| 7/6
* Health Care | 0.3831| 0.5| 2/5
* Communication Services | 2.0090| 0.2| 2/5
* Utilities | 4.6907| 0.5| 11/5
* Consumer Staples | 14.0402| 1.8| 9/2
* Materials | 24.6808| 1.2| 39/11
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
* Royal Bank of Canada | -12.8900| -1.0| -10.4| -5.9
* TD Bank | -12.4100| -1.2| 30.8| -17.7
* Brookfield Asset Management | -11.4800| -2.0| -22.9| -25.0
* BCE | 4.9550| 1.2| -43.6| -2.3
* Couche-Tard | 5.0010| 1.7| 12.0| -0.2
* TC Energy | 5.1370| 1.2| -28.2| 12.3

US
By Rita Nazareth
(Bloomberg) — Stocks whipsawed as a shockingly hot US inflation report rattled global financial markets, boosting bets the Federal Reserve could get even more aggressive with its belt-tightening campaign.
In a session of unnerving swings, the S&P 500 failed to close in the green after a sharp reversal from a 1.6% slide.
Also weighing on sentiment were hawkish signals from Fed Bank of Atlanta President Raphael Bostic, who said “everything is in play” to combat price pressures.
Treasury two-year yields, which are more sensitive to imminent Fed moves, climbed.
The euro snapped back after briefly falling below $1, while the loonie gained as the Bank of Canada raised rates by a full percentage point.
Bitcoin rose amid a revival of its inflation-hedge appeal.
Swap markets now indicate that the likely outcome of the July Fed policy meeting is now a coin toss between a 75-basis-point hike and an even larger increase of 100 basis points.
The reason is that the biggest surge in the consumer price index since 1981 showed that an inflation peak may still be out of reach.
“The June CPI print is ugly across the board,” wrote Krishna Guha, vice chairman at Evercore ISI. “This is bad news for risk assets as it increases the likelihood that the Fed will keep raising rates rapidly and end up overshooting by enough to push the economy into recession.”
Bank of America Corp. economists forecast a “mild recession this year” in the US, saying services spending is slowing and hot inflation is spurring consumers to pull back.
They join Wells Fargo Investment Institute and Nomura Holdings Inc. in expecting a contraction in 2022.
Deutsche Bank AG sees one starting in mid-2023.

More comments:
* “Clearly, we’re not out of the inflation woods yet,” said Mike Loewengart, managing director of investment strategy at E*TRADE from Morgan Stanley. “We’re likely in for a bumpy ride in the market.”
* “The June CPI release was an ugly print, no getting around it,” said Cliff Hodge, chief investment officer at Cornerstone Financial. “The Fed has no choice but to follow through on a more aggressive path, which raises the probability of recession next year.”
* “The only option available to the Fed is to slow economic growth enough to bring domestic demand down to meet constrained supply — possibly tipping the US into recession,” said Richard Flynn, managing director of Charles Schwab UK.
* “Inflation keeps heating up, defying expectations for a peak to be reached,” said Seema Shah, chief global strategist at Principal Global Investors. “We see rates moving to 4.25% next year as the Fed desperately attempts to recover from its earlier erroneous inflation read.”
The multi-year market mantra of TINA — there is no alternative to equities — is facing a major threat as bond yields are looking more attractive.
The percentage of S&P 500 members with a dividend yield higher than the 10-year US Treasury rate has fallen to the lowest since 2007.
Payouts are under pressure as companies grapple with fears of recession, historically high inflation and supply constraints.
In corporate news, Delta Air Lines Inc. fell short of profit expectations in the second quarter and said high operating costs will persist through the rest of the year.
Spirit Airlines Inc. agreed to delay a planned shareholder vote yet again on a proposed acquisition by Frontier Group Holdings Inc.
Investors fixated on the looming risk of recession are about to get a crucial read on a question that’s been burning a hole through markets for months: whether bank earnings will show cracks forming in the economy.
Net interest income for the six largest US lenders is expected to rise by roughly 15%, while at the same time mortgage and investment-banking revenue is projected to decline, according to data compiled by Bloomberg.
What to watch this week:
* Earnings due from JPMorgan, Morgan Stanley, Citigroup, Wells Fargo
* US PPI, jobless claims, Thursday
* China GDP, Friday
* US business inventories, industrial production, University of Michigan consumer sentiment, Empire manufacturing, retail sales, Friday
* G-20 finance ministers, central bankers meet in Bali, from Friday
* Atlanta Fed President Raphael Bostic speaks, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.5% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.1%
* The Dow Jones Industrial Average fell 0.7%
* The MSCI World index fell 0.4%
Currencies
* The Bloomberg Dollar Spot Index fell 0.2%
* The euro rose 0.2% to $1.0060
* The British pound was little changed at $1.1895
* The Japanese yen fell 0.3% to 137.32 per dollar
Bonds
* The yield on 10-year Treasuries declined six basis points to 2.91%
* Germany’s 10-year yield advanced one basis point to 1.15%
* Britain’s 10-year yield declined one basis point to 2.06%
Commodities
* West Texas Intermediate crude was little changed
* Gold futures rose 0.4% to $1,731.10 an ounce
–With assistance from Peyton Forte, Vildana Hajric, Isabelle Lee, Andreea Papuc, Sunil Jagtiani, Robert Brand and Cecile Gutscher.
Have a lovely evening.

Be magnificent!
As ever,

Carolann

History consists, for the greater part, of the miseries brought upon the  world by
pride, ambition, avarice, revenge, lust, sedition, hypocrisy, ungoverned zeal,
and all the train of disorderly appetite. -Edmund Burke, 1729-1797.

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM
Senior Investment Advisor

Queensbury Securities Inc.,
St. Andrew’s Square,
Suite 340A, 730 View St.,
Victoria, B.C. V8W 3Y7

Tel: 778.430.5808
(C): 250.881.0801
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com